Tagged one belt one road

Galaxy Entertainment Group Ltd (027.HK) and Sands China ltd (1928.HK) rose against the market despite the Hang Seng Index crashing by 300 points on 12 June, and they continued their rise on 13 June. Link REIT (823.HK), which reached a new high on 13 June after adjusting on the day before that, remains a strong stock that should not be given up.

The share price of MTR Corporation (066.HK) broke record high on Wednesday (May 17) after it had announced its plans to joint bid with a mainland rail giant to build the Kuala Lumpur-Singapore link as its first attempt to capitalise on China’s “Belt and Road” trade strategy.

China’s “One Belt, One Road” (OBOR) summit, or what is formally called the Belt and Road Forum has pushed up the Hang Seng Index by 215 points. In the future, China would be injecting over a trillion Renminbi of capital into the project. Seems like it is about time to speculate on OBOR concept stocks.

Following the signing of the U.S.-led Trans-Pacific Partnership (TPP) agreement, America’s strategy to besiege China is quite apparent. The bright side of the story is that many TPP member states are at the same time the signatories of other trade deals. Therefore, China should speed up its deployment of One Belt, One Road (OBOR).

Heading into 2016, the slowdown emerging from China and the weakness in the ASEAN region appears likely to continue to weigh down on corporate earnings and stock valuations. That being said, CIMB believes that the negative sentiments have been priced into current valuations.